To read the digital edition of the 2011 Minnesota Census of Women in Corporate Leadership, which accompanied this story in the April issue of Twin Cities Business, click here.
Andrew Humphrey has tackled his fair share of challenges over the years, not the least of which has been leading Minneapolis-based law firm Faegre & Benson through a merger only a year after becoming its managing partner. Yet one of his more intriguing conundrums has been ensuring that women ascend to top leadership positions within his firm, now Faegre Baker Daniels.
“We want more women in our most senior positions, because having a diversity of views and perspectives when strategies and key decisions are made ultimately leads to better results for clients,” Humphrey says. But, of course, knowing what’s best and achieving it can be two different matters.
Twenty years ago, the percentage of women graduating with law degrees began to nearly equal that of men. (The percentage of women surpassed that of men in 1993, then dropped back into the upper 40 percent range.) As it did, the legal community expected that incoming women attorneys would eventually work their way up into top positions. But about four years ago, Faegre discovered this wasn’t happening within its own walls. Worse, it found that talented female attorneys were leaving after only a few years with the firm.
Faegre’s diversity committee spent one year examining why women were not staying with and advancing within the firm, and what could be done to improve matters. By the end of 2011, Faegre ranked ninth amongst the nation’s top 100 law firms for women, according to MultiCultural Law magazine; it also was named one of the Best Law Firms for Women by the Women in Law Empowerment Forum. Today, women represent 24 percent of all attorneys at Faegre, compared with an industry average of 16 percent. Three of the firm’s five-member C-level leadership team are women.
What changed? Corporate policies were modified and new initiatives designed to remove barriers and encourage talented women to pursue top leadership positions.
Business-as-usual mentoring wasn’t yielding results, so new mentoring opportunities were developed through a formalized women’s leadership program. Generational perspectives were also a challenge. Junior attorneys, both men and women, saw older partners making lifestyle sacrifices that younger lawyers didn’t necessarily want to make.
Flextime was also readdressed and clarified. Women attorneys were reluctant if not fearful to take flextime, despite advice from their managers to do so whenever needed. Men were working flexible hours, so of course women could as well— simple as that. Or so Faegre managers thought.
“Unfortunately, female employees didn’t feel comfortable taking advantage of flextime because they were afraid it could typecast them,” Humphrey notes. Leadership talked with managers throughout the firm to encourage greater use of flextime, but there was still reluctance by women to take it.
The solution turned out to be a rewriting of HR policies that more explicitly spelled out that it was okay for men and women to take flextime so long as their work got done. It didn’t matter where it was completed or if it was finished after their children’s soccer games, band concerts, and homework. The rewrite encouraged women to use the flexibility benefit without fear of reprisal.
Faegre also identified apprehension among male attorneys about male/female interaction. One male partner was uneasy with wanting to celebrate a legal victory with his usual “let’s celebrate and go have a drink” because the other team member was female. Would his overture be misperceived as something other than a sincere invitation to celebrate as two professionals? His query shed light on how both men and women can still be thrown off course by preconceived notions and fears. Again, Faegre took action by openly discussing problems with employees to create solutions.
The challenges that Faegre addressed are similar to those of other Minnesota corporations interested in increasing the percentage of women within their highest leadership roles—board directors and C-suite executives. And the subject is becoming a greater priority for businesses looking to maintain or improve their competitiveness in the marketplace. Yet despite increasing awareness of how important gender diversity is to a company’s bottom line, it appears that corporate America’s advancements on the subject has stalled in recent years.
And while, in the past, this subject was often attributed to generationally shaped sexism and old-fashioned apathy, today it involves a myriad of complex issues ranging from how corporate culture in America needs to become more work/life balanced, to preconceived notions that women have about how they may be judged, regardless of what the rules allow or encourage them to do.
A diverse work force in an increasingly diverse business world simply makes sense, many CEOs say. How else can a business understand its constituents well enough to serve them? “The value of our firm is its people,” says Andrew Duff, chairman and CEO of Minneapolis-based Piper Jaffray, a leader within the investment banking industry for women in top executive positions. “Over time, to best reflect your client base, you need to diversify your leadership and your organization. Without it, we would not be as competitive here and in other markets where diversity is even more important.”
Research involving 6,000 leaders recently conducted by PDI Ninth House found that women usually rank higher in a greater number of key leadership competencies than do men, especially the further down a leadership chain one goes. The study found that women are typically best at self-leadership, customer matters, trust, and dealing with people while men tend to score highest in the areas of strategy, leading courageously, and finance.
At the top-leadership level, however, men and women tend to have almost the same number of key competencies, but those competencies are distinct. Mixing these two different but complementary sets of key competencies through a gender-equal executive team leads to better overall business results and higher profitability. Meanwhile, many developing countries, including China and India, are further ahead at promoting women into top business leadership positions, helping to accelerate their economic growth rates beyond that of the U.S.
Women have accounted for more than 40 percent of the U.S. work force for nearly 40 years now—plenty of time for many of them to advance up the corporate ladder. Yet only 3 percent of Fortune 500 companies have female CEOs. About 14 percent have women executives, and 16 percent have women on their boards of directors, according to Catalyst, Inc., a nonprofit women’s research group.
In Minnesota, 6 percent of the state’s 100 largest publicly traded companies have women CEOs, and 17.4 percent of all executive positions are held by women. In fact, Minnesota leads the nation with the highest percentage of women corporate executives, according to research that compares activity here with 13 other regions participating in an annual study done by ION (InterOrganization Network), a national nonprofit dedicated to advancing women as corporate directors and executive officers.
Minnesota lags a bit when it comes to boards of directors, however. Women hold 14.2 percent of the board seats at Minnesota’s 100 largest publicly held companies, compared with 16.1 percent held by women within Fortune 500 companies nationwide. In the 14 regions reporting data to ION, women hold between 8.1 percent and 17.7 percent of board seats.
What worries those who follow the issue of women in business leadership is that Minnesota has actually regressed when it comes to directorships, according to the fourth annual Minnesota Census of Women in Corporate Leadership. (See the insert starting opposite this page. The census feeds Minnesota data to ION’s annual study.) Fifty independent directors were appointed to the corporate boards governing Minnesota’s 100 largest public companies during 2011; only five of them were women. In terms of total available board seats awarded to women last year, 10.4 percent went to women—a nearly 50 percent drop from the 19.4 percent of new appointments secured by women in 2010.
“The importance of board diversity, however defined, can have a dramatic impact on the culture, tone, and decision-making of the board itself,” says David Fisher, counsel at Minneapolis law firm Larkin Hoffman Daly & Lindgren and president of the National Association of Corporate Directors, Minnesota chapter. “The statistics don’t lie: When women are in the boardroom, company performance improves.”
Fisher adds that “merely giving a nod to diversity by placing a woman on an all-male board, for instance, may not yield the full benefits of solid board decision-making. These benefits are better realized when there are two or more women on a normal-sized board, who then are able to interact and leverage their position in such a way as to influence analysis of such decisions. Call it a ‘critical mass’ of board governance.”
Indeed, studies have found that companies with two or three women on their boards deliver higher returns on equity and total returns to shareholders, compared to those with one female director or none. Yet while women serve on the boards of 72 of Minnesota’s 100 largest publicly held companies, they do so as the sole woman serving as a director in more than half those companies. There are two women directors at 26 companies, and three women directors at six companies.
Progress is being made on a variety of fronts, however. More and more, leaders are recognizing that gender diversity at the top is critically important to achieving improved bottom-line performance. In response, many organizations are grooming tomorrow’s executives through sophisticated internal leadership programs, informal mentorships, and everything in between.
The 2011 Minnesota Census of Women in Corporate Leadership recognizes organizations that have made the most progress in advancing women into top leadership roles. It does this by highlighting all publicly traded Minnesota companies that have both 20 percent or more women on their boards and 20 percent or more female executive officers. CyberOptics, MTS Systems, and Target received Special Distinction for achieving 30 percent or more women directors and 30 percent or more women executive officers.
There are, of course, dozens of other Minnesota companies, public and private, making great strides on this issue, but not yet topping lists such as those in the Minnesota Census. One example is Minnetonka-based UnitedHealth Group, where women hold a large percentage of middle and upper-middle management positions. This, too, represents significant progress when it comes to women leading in corporate America—more women are now in management, professional, and related occupations nationwide than are men, according to Catalyst. The pipeline of female C-suite candidates is the fullest that it’s ever been, promising a potential surge in women CEOs in the near future.
About four years ago, Austin-based Hormel conducted internal research and goal-setting around advancing more significant numbers of qualified women to leadership positions throughout the company, according to Minnesota Census co-author Rebecca Hawthorne, director of the master of arts in organizational leadership program at St. Catherine University. One of Hormel’s tactics is an internal program called Women Our Way, which provides female employees with education, leadership, networking, and mentoring opportunities. Today, women hold four of Hormel’s 12 board positions. Two women were added to the executive leadership team last year.
As Minnesota companies delve deeper into how they can advance more women into top leadership positions, a common set of challenges arise.
Providing the Right Experience
CEO candidates need a broad range of business-related experiences, and one of the best places to pick them up is on a board of directors.
“Women still have a tougher time getting some of those broadening experiences, such as being on a board of directors,” says Mary Brainerd, president and CEO of Bloomington-based health care provider HealthPartners. “I learned so much sitting at a board table for another company—and felt that I brought back a lot of value in terms of other ways of approaching issues, analogies to someone else’s business problems compared with what we were facing in my organization. Spots at the board table are really helpful for getting you prepared for the CFO or CEO spot.”
Too often in Minnesota, however, the same women are recruited for available board seats. “There’s a talent-spotting element to choosing board members, just as there is to executives,” Brainerd says. “And I think it’s sometimes weaker when it comes to knowing who the emerging women leaders are in the community.”
In addition to directorships, “Women must learn economics, no matter what their major field is,” said one Marilyn Nelson, then a board member at First Trust Company in St. Paul, in an August 1974 Mpls. magazine story on “Woman Power!” What was true 37 years ago remains true today.
Anyone whom a company hopes to groom for a top leadership position needs to know not only the business, but also why and how business works. And the best way to gain such knowledge is by working in profit-and-loss (P&L) positions, says Janet Dolan, president of consulting services firm Act III Enterprises and former president and CEO of Golden Valley–based Tennant Company.
“I often hear people say that women haven’t had enough time in the pipeline,” Dolan says. “But it’s very important to understand which pipeline you’re talking about. It’s not just tenure in a company. It’s whether women have gotten operational experience P&L positions. When that happens, doors open.
“On the other hand, it’s still challenging for women to actually get into P&L. But that’s the experience anybody needs to really get a leadership role in a company. And clearly, the kind of track record gets looked at for who is going to lead divisions and move up. It’s critical that women go beyond service roles in HR and finance, and get into the P&L side of the house.”
Improving the Mentoring Process
Companies that are serious about increasing the number of women in top executive positions have mentoring programs. And as Faegre did, those companies are improving them to be more effective.
Mentoring programs typically establish relationships on common ground between younger employees and more experienced executives, who teach their mentees the mistakes she or he made, and what was done to recover from those mistakes. Discussing successes is important, too, leaders say, especially when the mentor and mentee are in the same firm and the mentee is trying to maneuver through a maze of organizational politics.
Brainerd and others say that it’s critically important for the top leaders of a company to mentor, in addition to ensuring there are mentoring programs that address up-and-coming leadership at other levels within the organization.
This comes back to developing a healthy pipeline. Richard Templeton, chairman, president, and CEO of Texas Instruments, was quoted in a 2010 Catalyst report as saying that companies need to “build programs to prepare women at every level to be role models for those coming just behind them, who are watching how they manage career and life as they advance. We also need to challenge some of the rhetoric that steers women away from line leadership roles, such as claims that business unit managers must travel all the time. Do they travel? Yes. All the time, no.”
As for what company executives advise up-and-coming leaders, Brainerd tells young women—and men, too—who aspire to C-suite positions: “Don’t try to be something you’re not. For instance, I’m not a sports nut, but I’m well informed on a lot of things, including sports, history, and politics. Just be a well-rounded person with whom people want to work. Most of getting ahead in the corporation is really about being a good team player.
“If you’re a good team player,” Brainerd adds, “others will overcome a lot of their preconceived notions if they can say, ‘She’s just darn good to work with. She’s always there to support me and when we were on the team together, we made things happen. I trust her.’”
Developing a Healthy Work/Life Culture
Another challenge for corporations wanting to hire women C-suite executives is the tendency for women to be more thoughtful about what such a move can do to one’s personal life.
Even as women gain the right credentials—board service, P&L experience, great mentoring—and ascend the corporate ranks, many choose to stay in their vice president or executive director positions, rather than take that last step to a C-suite position or, better yet, the CEO’s chair.
“Younger women are more confident about asserting their goals,” Dolan says. “They expect more opportunities. But when they hit their 30s and start to have the work/family issues, I don’t think they are as willing to push as hard” as women professionals who came before them. “I don’t know that the work ethic is different, but the pattern of how people work through their careers is different. [My generation] kind of started at the bottom, began working our way up, pushing every barrier out of the way to make it. Younger women don’t have as many barriers. They kind of move about halfway up the ladder and they’re doing well and everything, and then they have children and sort of stall professionally. Whether or not they come back is the real question.”
Corporations seriously interested in increasing the number of women in top executive roles provide a culture and work environment conducive to those who want to pursue both career advancement and a healthy family life. One local company well known for its ability to do this is Golden Valley–based General Mills.
In 2011, it ranked first on the National Association for Female Executives’ list of “Top Companies for Executive Women.” In describing why, the association says, “Women presidents outnumber men and run four of the seven major retail divisions. Half of those promoted from the U.S. directors to officers in 2009 were women. So were 59 percent of participants in the General Mills Institute for Leadership Development. Five women serve on the company’s 14-member board.”
Such environments remain the exception rather than the rule, however, leading some women to alter where they work as they pursue a C-suite position. Nichol Beckstrand, COO of Twin Cities–based Sunrise Community Banks, decided to hold off having children until she was a little older, then identified an employer that provided her with a leadership position at work but enough flexibility to spend time with her children.
This leads to another issue, that of retention. “The more employers understand the value of flexible hours, and encourage work/life balance, the better they will do on this front,” says Amanda Brinkman, vice president, brand and creative services, at Golden Valley–based Allianz Life Insurance Company of North America. “Allianz has been an amazing place for me as a parent. They opened a child care facility last spring, and we love having our daughter attend the day care on site. It is amenities and efforts like this that will help employers retain top female talent.”
Encouraging and Supporting Risk Taking
“Part of the problem of filling critical roles with women is themselves,” says Dee Thibodeau, co-CEO of Plymouth-based Charter Solutions. “Too often, women [when first in a leadership role] ask forgiveness: ‘Oh, I’m sorry, I’m not sure if I’m good enough to be doing this.’ Women have fantastic abilities, but many need somebody telling them, ‘Yes, you absolutely can do it.’ The problem is complex—steeped in age-old practices and archaic attitudes.”
Women tend to be more risk adverse, according to national studies. Yet corporate cultures often expect from up-and-coming leaders a willingness to take risks, and the ability to, more often than not, prove the risk was worth it.
“Maybe it’s old-school wisdom, but it’s still wise: take risks,” Dolan advises aspiring women business leaders. “Part of the risk factor is seeking opportunities. Often, you have to let your manager and others in management know you are interested in running an operation.”
Companies interested in increasing the number of women in top positions need to first make sure that their culture supports risk taking—and understand how women view risk differently from men. Women may need to be encouraged more to take risks and be more competitive. They also need to see that there’s more than just words and policies encouraging them to do so.
“When it comes to one’s willingness to take risks, for women, a lot still depends upon who you see at the top of the organization,” Brainerd says. “No matter what the policies are, if you don’t see other women progressing in an organization or in some of the key top spots, you end up wondering, ‘Is my career going to be a dead end here?’”
A phrase from her early childhood helps Shari Ballard to take risks and be competitive when need be. The president of international for Richfield-based Best Buy recalls first hearing “The devil loves a coward” when she was six years old, playing euchre (a card game) at her great-grandparents’ kitchen table.
“In euchre, you have to take an offensive or defensive stance, based on your cards,” Ballard explains. “I was Great-Grandma’s partner, and if I hesitated on a play, she’d look at me with this remarkable intensity and remind me about the devil and cowardice.”
She smiles about it now, but back then, Ballard took her elder’s admonishment to heart and learned to embrace the fiercely competitive spirit that is integral to the women in her family. Nearly 20 years into her career at Best Buy, she’s known and respected for that spirit. Her boss, Brian Dunn, Best Buy’s CEO and director, says that Ballard is the most competitive person he’s ever met. (“He hasn’t met my mother!” Ballard says, laughing.)
Ballard considers herself fortunate to have grown up in a setting with strong female role models. From them, she learned the ability to work hard, the confidence to take risks, and the competitive nature that is inherent to her success. She’s also aware that in many ways, her experience is unique. And she’s concerned that there aren’t more women in corporate leadership roles.
“Best Buy has wide range of work styles and life experiences in our work force,” Ballard says. “We enjoy a deeply diverse executive team. That range is expanding, although we remain light on some experiences that are critical to our current and future success. We still have a lot of work to do.”
Addressing the Bigger Picture
Perhaps the most important issue, area business leaders say, is the need to keep women in business leadership in perspective with the overall need for companies to be more inclusive, period. And that inclusiveness means diversity beyond gender.
“Women in leadership is only one dimension to the point that it’s important to have more diversity anywhere [regardless of the industry],” Brainerd says. “You want generational diversity, you want racial diversity, you want gender diversity. And every time you get another perspective, another point of view, another way of looking at a problem, your organization is better for it.
“Fundamentally, most of us are going to end up serving a much more diverse and changing local and national community, and international clients,” Brainerd adds. “So to not understand and benefit from a lot of different perspectives is like a one-note song. You’re better off if you have all the notes.